FIIs Pull Out ₹1.13 Lakh Cr From Indian Markets in March Amid West Asia War

Foreign institutional investors (FIIs) have been pulling money out of Indian stock markets at an alarming pace, with net sales hitting ₹1,13,810 crore through March 27, already surpassing the previous record outflow of ₹94,017 crore recorded in October 2024, according to NSDL data. With two trading sessions still remaining in the month, the outflows could extend even further.

On Friday alone, FIIs sold domestic shares worth ₹4,367.30 crore, while domestic institutional investors (DIIs) stepped in as net buyers at ₹3,566.15 crore, partially cushioning the blow.

The selloff marks a sharp reversal from February, when foreign portfolio investors (FPIs) had pumped in ₹22,615 crore, the highest monthly inflow in 17 months. In January, they had sold shares worth ₹35,962 crore.

Experts point to a cocktail of factors driving the exodus. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the selling was fuelled by "the weakness in global equity markets following the war in West Asia, the steady depreciation of the rupee, fears of decline in remittances from the Gulf region and concerns surrounding the impact of high crude price on India's growth and corporate earnings."

He added that FIIs were sellers across other emerging markets such as Taiwan and South Korea as well, pointing to a broader global risk-off trend. "The poor returns from India vis a vis other markets - both developed and emerging- during the last eighteen months is the principal reason for FPI’s indifference towards India. If their sustained selling strategy is to change, there should be an end to the hostilities in West Asia and decline in crude prices," he added.

With the latest withdrawals, total foreign investor outflows from Indian equities have reached ₹1.27 lakh crore so far in 2026, underscoring the scale of foreign capital retreat amid heightened uncertainty.